Hedge Fund Manager Survey Finds Sentiment Moving Against Europe, in Favor of U.S.

New York (HedgeCo.net) - Investors have recovered their bullishness towards equity markets but are shifting their focus away from Europe and into the U.S. and Japan, according to the BofA Merrill Lynch Survey of Fund Managers for March.

A total of 207 fund managers, managing a total of US$589 billion, participated in the global survey from 5 March to 11 March. A total of 165 managers, managing US$403 billion, participated in the regional surveys.

After weakened sentiment in February, the survey shows that investors have restored their faith in equities with a net 46 percent of asset allocators saying they are overweight the asset class, up from 33 percent the previous month. Cash positions have fallen with respondents at a net neutral cash allocation compared with a net 12 percent underweight in February.

Asset allocators have retrenched from Europe, however. A net 21 percent are underweight European equities this month, up sharply from a net 2 percent overweight in January.

The change in favor of U.S. equities has been similar. A net 19 percent of asset allocators are overweight U.S. equities this month, up from just 1 percent in January. Japan is also regaining popularity. A net 6 percent of allocators are overweight Japanese equities, the most bullish reading since August 2007, and up from a net 10 percent underweight in January.

Global investors believe that the corporate outlook is better away from Europe. A net 40 percent of the panel says the outlook for eurozone corporate profits is the least favorable of all regions.

"Investors' concerns about Greece are easing, but European country risk remains a key constraint to optimism over economic recovery," said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Research. "Investors are more willing to embrace corporate risk, via equities, than sovereign risk," said Michael Hartnett, chief Global Equities strategist at BofA Merrill Lynch Research.

The net number of European fund managers predicting growth in their own economy over the coming 12 months has fallen to 45 percent, down from 72 percent in January, according to the Regional Fund Manager Survey. While European sentiment might have been expected to weaken, a similar fall in optimism is also evident among U.S. investors. A net 43 percent forecast growth in the American economy over the next 12 months, down from a net 76 percent in January.

Investors in both regions have stronger belief in earnings growth. A net 60 percent of European respondents predict improved earnings in the coming 12 months, an increase of 11 percent on February. Their colleagues in the U.S. are more positive with a net 72 percent forecasting earnings growth, up from a net 52 percent in February.

U.S. and European investors have significantly scaled back their cash allocations. A net 9 percent of the European panel is overweight cash this month, down from 26 percent in February. The corresponding numbers for U.S. investors are a net 8 percent in March and 19 percent in February.

European respondents have increased exposure to cyclical sectors, including Basic Resources and Construction. They have reduced their underweight position on banks. US investors have also increased exposure to cyclicals, such as Industrials and Materials, but have extended their underweight positions in Banks.

SEC Charges Texas Hedge Fund Adviser With Fraud

HedgeCo News - The SEC has filed a federal case against hedge fund advisor Stephen X. Kim and Spyglass Management, L.P. for their roles in allegedly defrauding Spyglass Capital Partners, L.P., a hedge fund managed by Kim through Spyglass. according to court filings.

The SEC complaint, filed in Texas, alleges that between in 2004 and 2006, Kim and Spyglass raised approximately $4.7 million from investors located primarily in Houston, Texas using offering materials that contained misleading information relating to Kim's education, business experience, and compensation.

The SEC alleges that Kim and Spyglass failed to employ any hedging strategy to manage risk, causing the hedge fund to loose over $2 million then directing the hedge fund to make approximately $1.7 million in Ponzi payments to investors.

Finally, the SEC alleges that Kim misappropriated approximately $1.5 million of the hedge fund's remaining assets to repay several outstanding personal obligations.

Without admitting or denying the allegations, Kim and Spyglass have made a settlement with the SEC, which is subject to the approval of the United States District Court for the Southern District of Texas.

SSARIS Wins Fund of Hedge Fund Award

HedgeCo News - Hedge fund and FoHF manager, SSARIS Advisors, LLC, won the "Global Multi-Strategy ($500 million -$1 billion) over 3 years" award at the annual InvestHedge FoHF Awards ceremony held last night in New York City. SSARIS won in the Multi-Manager Absolute Return Strategy category.

To qualify, all funds of funds must provide a strategy allocation breakdown for each fund nominated. InvestHedge has the final say in which category a fund is nominated. Winners are decided using an established methodology based on a combination of Sharpe ratios and returns over the relevant time period.

SSARIS Advisors, LLC is a majority-owned subsidiary of State Street Global Alliance, LLC. SSARIS Advisors, LLC was founded in 2001 and is directed by Mark Rosenberg, Chairman and CIO; Peter Hinrichs, CFO and Chief Compliance Officer; and Jim Tomeo, COO and Senior Portfolio Manager.

With $1.9 trillion in assets under management, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Montreal, Munich, Paris, Singapore, Sydney, Tokyo, Toronto and Zurich, and offices in 26 cities worldwide.

UCITS Hedge Fund Strategy Index up 0,93% in first two weeks of March

HedgeCo News - The UCITS Hedge Fund Strategy Index gained 0,93% within the first two weeks in March 2010, every strategy except fixed income and market neutral were positive, Global macro not only being the most successful strategy in 2010 but also in March with gains of 2,85% so far.

The other most successful strategies in March are convertible (+1,75%), CTA (+1,70%) and L/S equity (+1,54%), the latter turning positive ytd for the first time.

The UCITS HFS Index Series is the first index family that tracks all UCITS funds using hedge fund strategies. The UCITS HFS Index Series includes all UCITS III funds that apply absolute return strategies, have more than 10 Million Euros of assets under management, offer at least weekly liquidity and have reported numbers for more than one month. Index tracking funds, long-only and 130/30 strategies are excluded.

The indices are calculated on every 5th, 10th and 15th business day and at the end of each month by the index calculator Structured Solutions AG.

There have been 8 UCITS hedge fund launches since January 2010.

New Ticonderoga Launch As Hedge Funds Embrace ETFs

HedgeCo News - Institutional broker dealer, Ticonderoga Securities has launched an exchange traded funds (ETF) desk, led by industry veteran William Bauer. Bauer joins Ticonderoga with more than 18 years of institutional equity and derivative sales and trading experience, with five years focused on ETFs.

“Hedge funds and money managers are increasingly embracing ETFs as a superior product with greater transparency and liquidity,” said Bauer. “As this continues, Ticonderoga will be positioned well for growth.”

The new group will specialize in market making capabilities for institutional investors moving in and out of ETFs. The team will also advise clients on portfolio-trading issues, provide analysis and strategy, and assist in order execution through strong collaboration with the firm’s Sales & Trading Desk. As head of the ETF Desk, Bauer will focus on building out the ETF platform over the next several months, adding support staff, assistant traders and sales traders focused on ETF sales.

Bauer comes to Ticonderoga from Knight Capital, where he was a Director in ETF sales and trading. Before that, he was Vice President in sales and trading on the ETF market-making desk at Newedge Financial LLC, and also served as Vice President in sales and trading at RBC Capital Markets. Bauer attended University of Hartford with a focus on economics and finance.

Hedge Funds Leaders Forum 2010

The Hedge Funds Leaders Forum 2010, "Generating Alpha in Challenging Times", is being held March 18th, in New York City. The GoldenNetworking.com event will review recent performance of multi-strategy hedge funds, at panel "Generating Market-Beating Returns Under the Watchful Eye of the SEC".

Dow Jones reported: "The average hedge fund lagged behind the nearly 3% return of the Standard & Poor's 500 Stock Index return in February. The hedge funds that beat the market tended to be multi-strategy, according to both hedge fund databases and fund managers' letters to investors. Daniel Loeb's Third Point Offshore fund was up 3.2% for February and 6.9% for the year through February, according to HSBC Private Bank; the fund is multi-strategy."

Panelists, speakers and sponsors are invited to contact the organizers by sending an email to info@goldennetworking.com.

Hedge funds up 0.52% in February

New York (HedgeCo.net) - Hedge funds returned to positive territory in February 2010 according to a preliminary Eurekahedge report. There were approximately 90 hedge fund launches globally in 1Q2010. With arbitrage hedge funds delivering 15 consecutive months of positive returns, gaining 26.23% since November 2008.

Hedge fund returns across most regions were marginally positive for February; however, early reports showed that North American managers, who make up 65% of the hedge fund universe, posted impressive gains of 1.41%. Regional managers capitalised on the marked improvements in market sentiment on the back of some strong earnings reports, positive movements in the US dollar and commodities as well as improved manufacturing data and the Fed’s decision to maintain low interest rates

Latin American funds were also positive with a 0.48% returns in February while Asia ex-Japan and Japan funds returned nominally positive performances. Continued problems in the eurozone led to negative results by the region’s managers, who were down 0.66% in February as the euro weakened amid speculation of Greece’s sovereign debt default.

The composite Eurekahedge Hedge Fund Index gained 0.52% during the month as the underlying global markets posted a recovery from a disappointing January. The MSCI World Index was up 1.23% in February, bringing its YTD figure to -3.01%.

The Eurekahedge CTA/Managed Futures Hedge Fund Index was up a strong 1.27% during the month. Continued low interest rates in the US also helped managers in the bonds sector to deliver yet another month of positive results. Fixed income, arbitrage and relative value hedge funds were all up during the month while distressed debt managers were flat to slightly negative.

Minnesota Hedge Fund Manager Petters May Face Double Madoff Term

HedgeCo News - U.S. prosecutors yesterday recommended a sentence of 335 years in prison for hedge fund founder Thomas Petters, more than twice the term given to Bernard Madoff, according to Bloomberg. Petters was charged with mail and wire fraud, money laundering and obstructing justice.

A federal judge in Minneapolis ordered Petters to be held without bail in October 2000, after a taped phone conversation revealed that the disgraced entrepreneur planned to leave the country.

Petters and his hedge fund, Petters Group Worldwide LLC was convicted in December 2000, of all 20 criminal counts, adding up to a $3.5 billion fraud.

“The defendant’s fraud is staggering and unprecedented in size and impact on victims and the community,” prosecutors said, according to Bloomberg.

The case is U.S. v. Thomas Joseph Petters, U.S. District Court, District of Minnesota. The final sentencing is set for April 8th.

2010 Top Hedge Fund Firm Launches

Via HedgeTracker
Name		Style	Estimated Assets at Launch $mm	Location
AE Capital Management		Global Macro	10	Singapore
Astenbeck Capital Management		Commodities Focused	1,400	Westport, CT
Black’s Link Capital Ltd		Event-Driven	NA	Central Hong Kong
Castle Hill Asset Management		Fixed Income	2,150	London
Doubloon Capital LLC		Distressed	NA	Norwalk, CT
Edward Hornstein LLC		Long/Short Equity	10	New York, NY
Munsun Asset Management		Asian Equities	NA	China
Nautical Capital Management		Commodities Focused	NA	Purchase, NY

The Hedge Fund Fraud Casebook - Review

New York (HedgeCo.net) - Research and Markets has added John Wiley and Sons Ltd's new report "The Hedge Fund Fraud Casebook" to their offering. An in-depth look at the first 100 cases of proven fraud at hedge funds.

Some highlights:

* First comprehensive survey of hedge fund fraud including 100 chronological fraud cases
* Includes descriptions of each case, diagram of the player interaction, and tables detailing monies recovered, fines paid, prison terms, and professional sanctions
* Useful for both individual and professional investors, particularly given the last eighteen months of fraud and mismanagement among leading financial professionals and companies

Author Bruce Johnson spent more than a decade as a hedge fund practitioner, managing and advising funds. He was CEO of Albourne America LLC, the U.S. arm of Albourne Partners, a hedge fund advisory firm based in London. While at Albourne, Johnson researched new approaches to hedge fund due diligence including the quantitative analysis of "fund failure" and hedge fund credit.

After an earlier career as an architect and city planner in New York and London, Johnson has gained twenty-four years worth of experience in finance, including extended postings in Tokyo, Hong Kong, and London. While head of Global Research for Baring Securities, he published an important paper on the future of the Chinese and Indian economies, correctly predicting their current impact on global trade, and also created and managed the first investable global emerging markets equity index.

Maples Launches Luxembourg Hedge Fund Administration Services

Independent hedge fund services provider, Maples Finance, has expanded its European service offering in Luxembourg following the approval of its Registrar Agent license by Luxembourg’s financial supervisory authority, the Commission de Surveillance du Secteur Financier.

"We are delighted to broaden our capabilities in Luxembourg, where we have acted as a licensed Domiciliation Agent since 2007." Maxine Rawlins, CEO of Maples Finance, said," As we begin to see recovery in global markets, Maples Finance is well positioned to deliver seamless services to our clients both in Luxembourg and globally."

Maples Finance services $30 billion in investment fund net assets from its worldwide network of offices in financial centres including Canada, Dubai, Dublin, Luxembourg, Hong Kong, and the Cayman Islands.

Hedge Fund Regulation Certification Launch

The Ireland-based Hedge Fund College has announced the launch of its Certificate in Hedge Fund Regulation, the first regulatory certification in the hedge fund industry.

“Never has it been more important for the hedge fund industry to demonstrate a greater regulatory awareness." Thomas Bullman, founder of the Hedge Fund College, said, "Both European and US regulatory proposals will have far-reaching effects. Everybody within the hedge fund industry has an obligation to ensure that they are sufficiently educated on how these new measures will impact them. The Hedge Fund College aims to provide a broad certification that a candidate has demonstrated an understanding of hedge fund regulation and current issues.”

The Certificate in Hedge Fund Regulation provides a broad-based curriculum in hedge fund regulation, delivered online by distance learning.

Sponsored by The Hedge Fund Society and its international advisory board of academics and commercial practitioners, the course provides an introduction to hedge funds, their history and the regulatory issues surrounding them. The course also provides a review of regulatory theory and analysis of the regulation of hedge funds, hedge fund managers, hedge fund service providers and hedge fund standards in the UK, EU and US.

NY Hedge Fund Manager Nadel Pleads Guilty in Ponzi Scheme

HedgeCo News - Former hedge fund manager Arthur G. Nadel has pled guilty to 15 counts of securities fraud, mail fraud, and wire fraud, the US attorney for the southern district of New York said.

The indictment claims that from 1999 through January 2009, Nadel perpetrated a Ponzi scheme to defraud investors in six different investment funds, consistently loosing money and using his investor money to fund his lifestyle and several businesses, including a real estate project in North Carolina, his wife's flower shop, and his purchase of several private planes.

From 1999 through January 2009, nearly 250 people invested more than $397 million with the Funds. NADEL received tens of millions of dollars in management fees and performance incentive fees. As a result of Nadels's Ponzi scheme, investors suffered losses of approximately $162 million.

The hedge fund manager pleaded guilty to six counts of securities fraud, one count of mail fraud, and eight counts of wire fraud, and faces a maximum penalty of 20 years in prison on each of the counts.

Nadel faces a maximum fine of the greater of $5 million or twice the gross gain or loss from the offense. For the mail fraud and wire fraud charges, he faces a maximum fine of the greater of $250,000, or twice the gross gain or less from the offense.

UCITS 3 Hedge Funds Index Launch

HedgeCo News - Geneva based hedge fund advisory company, NARA Capital, announced plans to release its UCITS Alternative Index® to the public. A series of indices aims to track the performance UCITS hedge funds and funds of funds.

”NARA has been tracking the emergence of UCITS hedge funds for more than two years and has constructed and developed what is probably the most comprehensive database of that universe." Louis Zanolin, Partner at NARA Capital said, "The trend for more regulated and liquid alternative strategies will increase the demand for UCITS alternative funds over the coming year, so will the need for independent comparative tools. We have therefore decided to publicly release the index performance.”

The UCITS Alternative Index® series are equally weighted. The performance for any particular month will accessible on the UCITS Alternative Index® website www.ucits-alternative.com generally on the 5th business day of the following month. The inception date of the index is 1st January 2008.

As of February 2009 the UCITS Alternative Index® was tracking close to 400 UCITS hedge funds and funds of hedge funds totaling more than 63 billion EUR assets under management. Only funds pursuing hedge fund like strategies are taken into account for the index calculation. Absolute return funds with no shorting capabilities as well as 130/30 and passive hedge funds index UCITS funds are excluded from the
index.

In 2009, the UCITS Alternative Index® Global returned +9.27% while the UCITS Alternative Index® Fund of Funds returned + 1.64%.

With +34.68%, the UCITS Alternative Index® Emerging Markets was the best performing strategy in 2009.

It was followed by the UCITS Alternative Index® Fixed Income which returned +11.83%. The least performing index in 2009 was the UCITS Alternative Index® Equity Market Neutral with a -0.57%.

At the end of January 2010, Macro hedge funds represented the largest assets under management with 27.3 billion EUR ($ 36.9 billion). It was followed by Fixed Income and Long/Short Equity Funds with respectively 26.7 and 20.7 billion EUR ($36.1 and $28 billion). In term of jurisdiction, 48% of the funds were based in Luxemburg, 20% in Ireland 17% and in France.

Hennessee Group: Hedge Fund Performance

HedgeCo News - Hedge fund consultant, Hennessee Group LLC, conducted a study examining the correlation between the breadth of equity market moves and the performance of long/short equity hedge funds relative to traditional indices.

Through this study, the Hennessee Group confirmed that hedge funds generally lag their traditional counterparts when the equity markets experience strong advances and winners greatly outnumber losers as witnessed in 2009. Conversely, when the markets experience a more balanced move or a meaningful move to the downside, hedge funds generate significant alpha on a relative basis.

“Hennessee Group research indicates that in market advances where winners outnumber losers by more than 3 to 1 (breadth ratio of 3.0), hedge funds generally struggle to differentiate themselves as performance is strongly driven by momentum (beta) as opposed to strong stock selection (alpha),” stated Mr. Gradante, Managing Principal of Hennessee Group . “During such strong, broad based gains, hedge funds have a particularly difficult time identifying good shorting opportunities as there can be a disconnect between fundamentals and stock performance. Therefore, short positions generally serve as a drag on performance in these markets.”

Ratio of Winners to Losers Historically a Strong Indicator of Relative Performance

The Hennessee Group evaluated the performance of the Hennessee Long/Short Equity Index against the S&P 500 Index while also taking into consideration the breadth of the equity markets each calendar year period dating back to 1983. Over these twenty three calendar year periods, the Hennessee long/short equity index underperformed the S&P 500 Index ten times. During nine out of those ten calendar year periods, the Hennessee Group found that the S&P 500 Index experienced at least 3 times the number of winners than losers (the lone exception we observed was 1998 when Long-Term Capital Management meltdown which caused distress in the hedge fund industry). To illustrate, in 2009, 425 of the S&P 500 Index constituents experienced gains while 73 experienced losses. With over five stocks up for every one stock down for the year, hedge fund managers found it very difficult to successfully add value with strong selection, particularly on the short side. The most profitable portfolio strategy in such an environment was to increase net exposure and lever the portfolio to benefit from the beta driven market. That said, while hedge funds generally lagged in such beta driven environments, they still managed to perform well as the Hennessee Long/Short Equity Index generated positive returns each calendar year, with double digit gains in eight of the ten.

The remaining 13 calendar year periods when the Hennessee Long/Short Equity Index outperformed the S&P 500 Index, the market moves were more generally balanced with a breadth ratio consistently less then three; providing long/short equity managers with a greater opportunity set to generate alpha on both sides of their books. Of particular note is 1999 when the S&P 500 Index experienced a strong +20% gain. Despite the strong equity rally, hedge funds managed to outperform the traditional index as the breadth of the move was more evenly balanced relative to other equity market rallies (breadth ratio of 1.06) allowing managers to generate alpha through strong stock selection. During other calendar year periods with low breadth ratios, hedge funds generated double digit alpha relative to the index irrespective of market direction.

2010 Outlook

In January, the S&P 500 Index declined -3.7% with 133 issues up and 366 issues down. Consistent with the results over the last 23 years, the breadth ratio of 0.4 proved favorable to hedge funds on a relative basis as the Hennessee Long/Short equity Index outperformed the S&P 500 by 280 basis points. A distinguishing factor between hedge funds and traditional equity investing in January was the ability to generate alpha with short positions and market hedges. The greater the universe of shorting opportunities, the greater the likelihood hedge funds will outperform their traditional counterparts, particularly during market downturns.

“In 2009, hedge funds most willing to take on greater net long exposure and bought high beta stocks were most rewarded while those funds that remained defensively positioned, with low net long exposure and an emphasis on fundamentals, generally lagged” said Mr. Gradante. “We believe 2010 will be different. We anticipate greater dispersion among sectors and stocks and a more balanced advance/decline ratio as fundamentals come into main focus again.”

Hedge Fund Fraud Case Postponed Till After Civil Suit

HedgeCo News - The date has been set for hedge fund founder Raj Rajaratnam's criminal suit, New York Judge Richard Holwell has delayed it till Oct. 25, 2010. "Ensuring a full opportunity for both sides to litigate all the issues," the court document read.

Prosecutors said the hedge fund manager would have an unfair advantage if a civil trial by market regulators went ahead before a criminal trial, Reuters reported. However, the Galleon team won the right to postpone the trial. The civil lawsuit is scheduled for August 2, 2010.

Rajaratnam is being accused of insider trading and securities fraud, generating as much as $49 million in profit.

Reuters says the majority of the stocks are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

Rajaratnam could face a sentence of up to 185 years, if convicted.

Capital Introduction Trends Affecting the Hedge Fund Industry

HedgeCo News - New York based institutional investment research company, Carbon 360, conducted a survey of third party marketers as well as capital introductions groups titled “Capital Introduction Trends in 2010”, to investigate the most sought after strategies, sourcing trends and due diligence concerns while asking how the industry might evolve over the next five years.

The survey showed that the investor base is now dominated overwhelmingly by institutions, family offices, and pension funds. Investors have also developed a taste for Global strategies in addition to traditional long/short funds, the survey found.

While performance remains a primary concern, transparency and risk management have grown to become critical concerns for investors.

“As hedge funds go, so goes the capital introduction industry.” Evan Rapoport, CEO of HedgeCo Securities LLC, said. “In that mode of thought, transparency and risk management are the popular trends. “If we can work with regulators to legitimize the industry and overcome the scandalous actions of a select few, I am all for it. This will be a major theme ongoing.”

“I expect institutional investors to be more receptive to newer managers, fee structures to remain stable, and foreign investors to invest more in the US and vice versa.” Rapoport said, “Europe should lose market share to Asia, and new markets will open up as countries move from developing markets to developed markets. Proprietary trading and hedge funds owned by large US banks will most likely weaken or disappear under the current administration and, more importantly, current US economy sentiment, leading to opportunities for independent investment management companies. Overall, I expect 2010 to build on the strength of the latter half of 2009.”

“When reviewing this year’s survey, the downward trend in assets does appear to be slowing, with some firms actually reporting slight increases in capital from the Q3 2009 forward.” Brian Shapiro, President of Simplify LLC, a portfolio management company, said, “Our hopes are that this data shows that the flight of capital and negative return trends of the past 24 months are now coming to an end, and the funds can utilize the lessons learned during these difficult times to continue supporting the process of hedge fund evolution from, opaque black-box, to transparent and liquid financial products.”

Galleon Hedge Fund Case Wins Temporary Reprieve

HedgeCo News - Hedge fund founder Raj Rajaratnam won an emergency order relieving him from having to turn over wiretap recordings in the SEC v Galleon case, according to a Reuters report.

Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC was seeking it from Rajaratnam and his co-defendant, Danielle Chiesi.

Rajaratnam’s lawyer last month attacked the U.S. government’s wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid.

The temporary stay was granted late yesterday by U.S. Court of Appeals, Reuters said. The reprieve came just two days after a U.S. District Court Judge ordered the deadline of Feb. 15 for Rajaratnam and Chiesi to surrender the recordings to the SEC.

Rajaratnam and Chiesi are being accused of insider trading and securities fraud, enabling the pair to generate $49 million in profit.

Reuters says the majority of the stocks are in technology, including, IBM, Intel, Akamai Technologies Inc, Polycom Inc, Hilton Hotels Corp, Google Inc, Sun Microsystems Inc SUNW.TI, Clearwire Corp, Advanced Micro Devices, ATI Technologies Inc and eBay Inc.

A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.

Judge Upholds 'Terminator' Sale To Hedge Fund

HedgeCo News - The U.S. Bankruptcy Court in Los Angeles has agreed to uphold the hedge fund Pacificor's purchase of the 'Terminator' franchise rights from Halcyon Holding Group LLC, The Wall Street Journal reports.

Halcyon Holdings had accepted a deal from hedge fund Pacificor on Tuesday after a five-hour auction, according to a reports.

The Terminator rights were sold for $29.5 million, following a legal battle in which Halcyon Holding was forced to file for bankruptcy, the case was started by the hedge fund which won the bidding wars, Pacificor.

Columbia Pictures Industries Inc. and Lions Gate Films Inc.'s final offer was $28.5 million, plus $5 million for each of the first three sequels, but eventually the team lost out to the frenetic bidding of the hedge fund.

"We're very pleased," hedge fund attorney David B. Shemano said in an interview with The Wall Street Journal.

"Not only did Halcyon receive the green light to sell the "Terminator" rights to Pacificor but the production company was finally able to resolve a dispute it had with the hedge fund during the sale process," Shemano said.

Rajaratnam & Chiesi Charged With a Superseding Indictment

HedgeCo News - Raj Rajaratnam and Danielle Chiesi Federal have been accused with a 19-count superseding indictment by Federal prosecutors yesterday, Courthouse News Service reported.

A superseding indictment is an indictment that is filed subsequent to an original indictment. It is usually based upon supervening events that logically change the nature of the original indictment.

The superseding indictment is based on guilty pleas from Anil Kumar and Mark Kurland, the Courthouse reported.

The government is claiming Rajaratnam and Chiesi made millions of dollars for themselves and their hedge funds by trading on inside information about Intel, IBM, Akamai Technologies, Polycom, Hilton Hotels Google, Sun Microsystems, Clearwire Corp., Advanced Micro Devices, ATI Technologies, eBay, and PeopleSupport.

The investigation started with suspicions in the 1990s when chip maker Intel Corp alleged that Rajaratnam was receiving tips from an Intel insider. The investigation was based on a witness who had first entered into a plea agreement with the United States before she began to cooperate in an investigation into Rajaratnam’s practices.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in the USA’s largest hedge fund insider-trading scheme. His bail was set at $100 million.

Hedge Fund Pacificor Wins Terminator Franchise Rights

HedgeCo News - Halcyon Holdings has accepted a deal from hedge fund Pacificor yesterday after a five-hour auction, according to a report by IndieMoviesOnline.com.

The Terminator rights were sold for $29.5 million, following a legal battle in which Halcyon Holding was forced to file for bankruptcy, the case was started by the hedge fund which won the bidding wars, Pacificor.

Lionsgate and Sony were strong bidders, but lost to the frenetic will of the hedge fund, which has an interesting backstory in the case.

For the full story of hedge fund Pacificor vs. Halcyon, we turn to MTV News, which reports:

"When Halcyon purchased the "Terminator" rights in 2007, Pacificor lent them some amount of money to cover the $30 million price tag. Pacificor also pushed the former rights-holder into bankruptcy and was the target of a $30 million filed by Halcyon which included allegations of extortion, bribery and fraud." MTV reports.

"The word is that the hedge fund's winning bid comes with a tantalizing string attached to it for Halcyon: in addition to the $5 million they'll receive for future "Terminator" movies and any royalties from the third and fourth movies, they are also officially off the hook on debts to Pacificor and other creditors, pending the approval of a bankruptcy court." MTV said.

"Have Pacificor got a good deal? Have Terminator fans got a good deal? Are there any Terminator fans left out there after Salvation?" Paul Martin, writer for IndieMoviesOnline.com asked, "Personally, this writer thinks those hedge fund whizzes at Pacificor could have saved themselves a few quid and just come up with their own, completely original, relentless, robotic movie monster. Something like... the Exterminator. Or the Killinator. Or the Deadenator."

Survey: 1 in 10 Hedge Funds Plans to Change Fund Administrators This Year

A recent survey by TKS Solutions revealed that 10% of hedge funds have considered switching administrators during the past 12 months due to issues stemming from timeliness and accuracy of partner and shareholder accounting reports.

"Based on feedback from our hedge fund customers," Ronald Kashden, President of TKS, said, "We discovered that many administrators were still struggling under the weight of convoluted spreadsheets.”

One particular vexing aspect of automating fund processing is the reality that every client is different and has unique reporting needs.

"We are advancing our software to address this through the use of user-defined reporting fields." Kashden said, "Now the user can create custom reporting fields for their clients that extend the database and the application’s reporting capabilities, which can be associated with investors, funds, or even transactions. Once created, the application is instantly aware of any of new fields and the relevant screens and reports are automatically adjusted to reflect these fields. By combining these fields with the built-in report writer, administrators can easily tailor reports to the needs of each client."

"Octopussy" Pleads Not Guilty To Hedge Fund Insider Trading, 6 Others

HedgeCo News - Seven hedge fund traders and lawyers pleaded not guilty to securities fraud charges in the USA v. Goffer et al. case, according to Reuters.

Zvi Goffer, dubbed "Octopussy", appeared before Manhattan federal court Judge Richard Sullivan to answer an indictment unsealed on January 21, charging them with securities fraud and conspiracy to commit securities fraud, Reuters reported today.

The others who pleaded not guilty were associated with Incremental, Reuters said; Zvi Goffer's brother Emanuel Goffer, Michael Kimelman and David Plate; Arthur Cutillo, who had been a lawyer at Ropes & Gray LLP; and another lawyer, Jason Goldfarb.

The Galleon insider trading case also involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp.

Reuters also reports that a former Wall Street hedge fund manager, David Slaine, pleaded guilty last December to charges of insider trading that reaped profits of $3 million. The plea was unsealed yesterday.

London Nominees Ltd. Launch Football Fund

HedgeCo News - The London Nominees Football Fund launched on Feb 1, 2010, with approximately $40 million in assets under management.

The investment panel includes ex international players, coaches and leading industry experts offering investment in clubs, players, related brands and franchises, at a low minimum investment. Up until now, the football industry has been highly specialized and is difficult for the average investor to participate in. The Football Fund has recently signed 2 key football figures, namely Carlos Alberto Torres, now Chairman of the Football Fund, and Bryan Robson, who is the ex-captain of Manchester United and is currently managing the Thai national team.

“I am thrilled to contribute my experience with Football teams and clubs to The Football Fund. Our team, while focused on business, is as much driven by the love of the sport as the goal of well-earned profit.” Torres, said, “The Football Fund invests not only in hard assets that bear fruit, but also in new ideas, fresh endeavors, and in the next generation of Football’s growth and development.”

“Our Fund empowers clubs, academies, and businesses around the world to advance the sport, and to make the dreams of tomorrow’s players a reality. The Fund’s goal is to create value for your investment; its mission is to give each investor the opportunity to invest in the passion, the excitement, and the richness of the Beautiful Game.” Torres said.

Salaries for the top players are approaching $10 million while the transfer fees can touch $100 million and just the English Premier League 2010-2013 UK broadcasting rights are in the region of 1.9 billion Euros.

The Top Ten Hedge Fund Launches Of 2009

Hedgco News - Assets raised by hedge fund startups in 2009 fell 36% from the previous year, marking the second year in a row that new fund assets declined significantly, according to the biannual AR New Funds Survey, published in the February issue of AR.

The largest new fund launches in the U.S. in 2009 amassed $14.89 billion, in contrast to $23.17 billion for the largest new funds in 2008 and $31.5 billion in 2007.

Although 53 funds with at least $50 million in assets launched by year-end, compared with 55 in 2008, the average size of the funds fell significantly. The number of new funds managing more than $1 billion also decreased. Only two new funds were able to end 2009 with $1 billion or more in assets, compared with 2008, which had five funds managing that amount.

Soros Fund Management alums Joshua Berkowitz and Marcel Kasumovich boasted the biggest new fund of the year with their Woodbine Capital Fund, a global macro strategy that launched at the end of 2008 but only started taking outside capital in 2009. The fund ended the year with $2.5 billion and is already nearing $3 billion thanks to additional in-flows at the start of 2010.

Arvind Raghunathan’s Roc Capital Partners Fund was the second-largest launch of the year—and the biggest that actually opened its doors in 2009. The firm’s global equity fund launched in August and ended the year managing $1 billion.

“There is still a reluctance of investors to part with their money. Moreover, the big issues of 2008 – transparency and liquidity – continue to be major challenges for new funds,” said Michelle Celarier, editor of AR. “The barriers to entry are also the highest they have ever been and the environment has been particularly challenging for capital raising.”

New strategies that are getting attention from investors include specialist and niche equity strategies such as those focused on health care, clean technology, climate change and alternative energy. Merger arbitrage is also attracting interest as the number of mergers and acquisitions increase.

TOP TEN HEDGE FUND LAUNCHES 2009

FIRM NAME	FUND NAME	STRATEGY	ASSETS 12/31/09 (in $ millions)	MANAGERS	MONTH LAUNCHED
Woodbine Capital Advisors	Woodbine Capital Fund	Global macro	2,500	Joshua Berkowitz, Marcel Kasumovich	January
Roc Capital Management	Roc Capital Partners Fund	Global equity, market neutral	1,000	Arvind Raghunathan	August
Pia Capital Management	Pia Macro Fund	Liquid global macro	949	Christopher Pia	June
LDH Energy	LDH Energy Opportunities Fund	Commodities	750*	William Reed	September
Realm Partners LLC	Realm Partners Fund LP	Multi-strategy/ event driven	650	Robert Millard	July
Harbinger Capital Partners	Credit Distressed Blue Line Fund	Distressed/credit	620	Philip Falcone	April
Saba Capital Management	Saba Capital Master	Credit	560	Boaz Weinstein	August
Plural Investments	Plural Partners Master Fund	L/s equity	550	Matt Grossman	January
Brevan Howard Asset Management	Brevan Howard Credit Catalyst	Credit	517	David Warren	June
Manatuck Hill Partners	Manatuck Hill Scout Fund	L/s equity	400	Mark Broach	July

* Estimated

HedgeFund Intelligence is the world’s leading information source on hedge funds and those investing in hedge funds, including funds of funds. It publishes performance data on more than 10,000 hedge funds and funds of funds around the globe, and its titles cover the U.S., European and Asian markets.

Fund Pros Launch LGBT Capital

HedgeCo News - Galileo Capital Management has launched LGBT Capital, a specialist Corporate Advisory and Investment Management Unit focused on the lesbian, gay, bisexual and transgender (LGBT) consumer market.

LGBT Capital provides corporate advisory and business development services for companies that serve the LGBT consumer sector. In addition, LGBT Capital is preparing to launch a fund that will invest in companies worldwide that provide products and services to the LGBT community.

LGBT Capital’s principals Anders Jacobsen and Paul Thompson have over 40 years combined experience in the investment management sector with distinguished track records in global investment managers including Goldman Sachs, Prudential Financial, Inc., Bankers Trust and Chase Manhattan Bank as well as a unique knowledge of the LGBT sector. Between them they have advised numerous mutual, private equity, venture capital and hedge funds on their establishment and launch, as well as provided growth and development strategies for existing investment funds.

The power of the ‘pink dollar’ is now well understood by mainstream global marketers. LGBT Capital believes that as LGBT freedoms continue to develop, growing companies will increasingly look to raise capital, merge and acquire, which will require specialist advice and capital raising options.

LGBT Capital has met with a significant number of LGBT business owners and managers and found that many plans do not come to fruition due to the lack of professional business development advice available and the shortage of advice on how to access external investors. This is partly because many LGBT-oriented companies were originally established with a degree of secrecy and without the financial support otherwise available to start-up companies.

“LGBT-oriented business owners often have the desire to expand but also frequently lack the expertise, correct capital structure or know–how to access funding” said Paul Thompson, co-founder of LGBT Capital. “We believe there is a significant opportunity to provide the financial expertise typically found within an investment banking context to LGBT companies, which in turn would allow quality companies to secure funding”.

“A LGBT oriented resort was up for sale recently but despite many parties expressing interest, sufficient capital could not be raised by any one company or investor on their own” Paul Thompson said. “There is huge interest from investors to be part of the growth in the LGBT market but without concentrating risk in just one or two investments. The Fund we are preparing will provide a diversified portfolio of investments, both geographically and by business sector, in order to satisfy this investor demand”.

A survey commissioned by Galileo Capital Management in December 2009 and carried out by Iliad, the LGBT business networking organisation, among members of the London LGBT business community found that 80% of LGBT companies believe there is insufficient specialist advice on capital raising and structure as well as M&A.

The survey highlights significant suppressed and unmet demand for investment banking and business development advisory services to LGBT companies. Of the respondents, 80% of LGBT companies require capital for expansion, 100% of LGBT companies have expansion plans including expansion outside of their current scope/geography and 100% of LGBT companies would consider mergers, acquisition and third party investment.

The survey also found 100% of potential investors in LGBT companies did not proceed with their investments, with 80% citing inadequate funding and capital structure as the main reason.

“We expect there to be a significant increase in LGBT-oriented companies in the developing markets, coupled with greater openness within the developed markets. This will provide significant opportunities for corporate activity, including cross-border investment opportunities requiring industry specialists”, said Paul Thompson, the former first foreign CEO of a mainland China fund management business.

Anders Jacobsen observed that “there appear to be some very interesting combined investment and advisory opportunities, notably where relatively mature companies are looking to expand into developing markets such as China”.

LGBT Capital has operations in Europe and Greater China and a team of advisors with global coverage. LGBT Capital is committed to working with quality LGBT-oriented companies and to supporting the liberalization of LGBT freedoms, combining private sector investment approach and expertise with philanthropic support.

Free Hedge Fund Analysis From Gazebo Financial Services

A Silicon Valley hedge fund management and technology firm, Gazebo Financial Services, LLC, today announced the introduction of a new, free, web-based software tool for selecting and analyzing hedge funds.

The Gazebo Analytic Platform (GAP) simplifies searching large hedge fund databases by combining sophisticated data mining tools with a streamlined user interface. Investors and fund managers can now find funds based on a text search of an entire database, or using selection criteria including Market, Style, Geography, and Performance. The unique Funds Like This TM feature identifies similar funds based on strategy and return history.

Financial researchers can analyze funds from this database and from data they upload themselves privately and securely. The customizable Fund Report and multi-fund Comparison Report provide a large range of traditional and innovative analytic tools and charts. Funds can be combined to simulate and analyze portfolio performance.

Gazebo is providing this free tool because the current offerings of hedge fund analytics software are simply too cumbersome and expensive. “We don’t understand how you can charge $5000 a year for search tools and some math,” commented Roy McDonald, Chairman & CEO of Gazebo Financial Services. “GAP is a user-driven project that cuts out the bloatware in other software. It delivers simple, powerful solutions that managers can use anywhere, anytime to improve their investment and fund management strategies.”

Kiva Plug

I just made a loan to someone in Bolivia using a revolutionary new website called Kiva (www.kiva.org).

You can go to Kiva's website and lend to someone across the globe who needs a loan for their business - like raising goats, selling vegetables at market or making bricks. Each loan has a picture of the entrepreneur, a description of their business and how they plan to use the loan so you know exactly how your money is being spent - and you get updates letting you know how the entrepreneur is going.

The best part is, when the entrepreneur pays back their loan you get your money back - and Kiva's loans are managed by microfinance institutions on the ground who have a lot of experience doing this, so you can trust that your money is being handled responsibly.

I just made a loan to an entrepreneur named Celestino in Bolivia. They still need another $750.00 to complete their loan request of $1,200.00 (you can loan as little as $25.00!). Help me get this entrepreneur off the ground by clicking on the link below to make a loan to Celestino too:

http://www.kiva.org/app.php?page=businesses&action=about&id=169377

It's finally easy to actually do something about poverty - using Kiva I know exactly who my money is loaned to and what they're using it for. And most of all, I know that I'm helping them build a
sustainable business that will provide income to feed, clothe, house and educate their family long after my loan is paid back.

Join me in changing the world - one loan at a time.

My Golden Globe

My first gold purchase, 18k, 12g. I saw it while shopping for my nieces at Christmas and it got stuck in my mind.

I told the jeweller's wife I would plug the boutique, so here it is: B&S Gold and Antique, Linnégatan 3, Goteborg, Sweden. (website coming) +46(0)311 259 97

The custom made pieces from Russia are awesome, (I was only allowed to see them because of this plug) and the antique collection is marvellous. The prices range from affordable to exorbitant and the collectors (husband and wife) have a classic taste which is never out of style.

Their collection includes pieces with: hidden latches, clasps and secret repositories, quite like some quasi-modern Steampunk pieces I have seen recently.

My little Earth is meticulously cast in gold, with all coastlines intact and the name of each continent etched in place.

Hedge Funds Care 12th Annual New York Benefit

New York - Hedge Funds Care is holding its 12th Annual New York "Open Your Heart to the Children" benefit on Thursday, February 25, 2010 at Cipriani 42nd Street.

A committee will award Michael E. Novogratz, President of Fortress Investment Group, with a Hedge Funds Care Award, among others. The first founder's award will be presented to Lee Daniels, director of Precious. Michelle Caruso-Cabrera of CNBC will serve as master of ceremonies for this year's event.

The New York benefit is one of the key charity events in the hedge fund industry, gathering over 1,000 industry leaders and raising over $1,000,000 for child abuse programs in New York, New Jersey, and Connecticut. This year's event will feature an elegant cocktail reception, in lieu of a seated dinner.

Event co-chairs include Dean C. Backer, managing director of Goldman Sachs and Richard H. Baker, president of the Managed Funds Association.

Silk Road Awarded Hedge Fund “Oscar”

HedgeCo News - Silk Invest's Luxembourg SICAV hedge fund, the Silk Road Income Fund, has been awarded the 2009 ‘golden bull’ prize for innovation at the ‘Finanzen Nacht’ ceremony in Munich. Hailed by the German press as the “Oscar of the financial world”, the award is sponsored by Euro, Germany’s leading finance publication. The gala evening was attended by over 500 delegates.

The Silk Road Income Fund was launched in October 2009. It gives investors exposure to a range of frontier fixed income markets, previously inaccessible to mainstream European investors in the shape of a UCITS compliant fund.

The award winning hedge fund was launched to compliment Silk Invest’s equity offerings, namely the African Lions and Arab Falcons funds. As its name implies, the geographic remit of the fund is Africa, the Middle East and the Central Asia, leveraging of Silk Invest’s position as a market leader in these geographies

Zin Bekkali, CEO of Silk Invest, said “we are proud to have been recognized in this way. We launched the fund so that our clients could capture the unrivalled risk-return profile that we see in these markets. To be called innovative is icing on the cake and is especially nice in view of all the effort we have put into structuring access to these markets.”

Silk Invest believes that the frontier fixed income markets are often mispriced and overlooked by the mainstream. Daniel Broby, the Chief Investment Officer of Silk Invest, notes that ”investment in frontier markets today is now feasible. Risk is mispriced and with appropriate diversification our portfolio managers have constructed a robust investment grade portfolio with substantial yield pick-up.”

The Silk Road Income Fund aims to manage 60-80 holdings across 25 countries. The target portfolio is to achieve annual returns of 16.5% with a duration of 3.4 years and an average rating of “BB+”.

Silk Invest is headquartered in London with staff in the UAE, South Africa, Morocco, Egypt and Cameroon. The Silk Invest team consists of highly experienced specialists from South Africa, Nigeria, Egypt, Pakistan, UK, Belgium, Netherlands, Ivory Coast, Cameroon, and Morocco.

Hedge Funds Charged Under SEC Rule Prohibiting Short-Selling

HedgeCo News - In one case this week, the SEC charged Los Angeles-based AGB Partners LLC and its principals Gregory A. Bied of Boise, Idaho, and Andrew J. Goldberger of Santa Monica, Calif., finding that they netted thousands of dollars in improper profits by shorting in advance of their purchase of stock in a secondary offering.

In the other case, also this week, the SEC charged Los Angeles-based Palmyra Capital Advisors LLC, finding that the firm violated short selling rules and improperly profited in three of its managed hedge funds. Both firms have agreed to settle the SEC’s charges.

These mark the first cases filed under the SEC's amended Rule 105 of Regulation M, which is designed to prohibit manipulative short selling ahead of follow-on securities offerings.

Rule 105 is intended to prevent abusive short selling and market manipulation by ensuring that offering prices are set by the market forces of supply and demand for the securities in an offering rather than by manipulative activity. The SEC is concerned that short selling ahead of offerings may reduce the proceeds received by public companies and their shareholders by artificially depressing the market price shortly before the company prices its offering. The SEC amended Rule 105 effective October 2007 to prevent this trading practice known as "shorting into the deal." The revised rule generally prohibits the purchase of offering shares by any person who sold short the same securities within five business days before the pricing of the offering.

The SEC found that AGB Partners violated both the pre- and post-amended Rule 105 to gain illicit profits. According to the SEC's order, AGB Partners used secondary offering shares in April 2007 to cover a portion of a short position in Boots & Coots International Well Control, Inc. In June 2008, under the amended rule, AGB Partners sold short shares of BGC Partners, Inc. and then purchased BGC Partners shares in the company's secondary offering.

According to the SEC's order, AGB Partners used two accounts. The account that was used for short selling consisted solely of Bied's and Goldberger's personal funds. The other account, a private investment fund they managed for outside clients, was used for participating in the follow-on offerings. Although amended Rule 105 created an exception to allow otherwise prohibited trades if the trades occur in separate accounts, the SEC's order found that Goldberger's and Bied's close collaboration with the accounts fell outside the separate accounts exception.

In its order against Palmyra, the SEC found that the firm violated Rule 105 in connection with short sales made in advance of a public offering by Capital One Financial Corp., resulting in improper profits of $225,500. Palmyra sold short a total of 50,000 shares of Capital One stock on Sept. 18, 2008, and then received 50,000 shares from Capital One's secondary offering on Sept. 24, 2008.

In settling the SEC's charges without admitting or denying the Commission's findings, AGB Partners, Bied and Goldberger consented to be censured and pay more than $50,000 in disgorgement and penalties. Palmyra Capital consented to be censured and pay more than $330,000 in disgorgement and penalties.

Hedge Fund Manager Salus Alpha Launches UCITS III Commodity Arbitrage Fund

HedgeCo News - UCITS III hedge fund manager Salus Alpha has launched a new Commodity Arbitrage fund which the company believes is an innovation both in the UCITS III and in the hedge fund world.

The investment approach of the Salus Alpha Commodity Arbitrage enables the fund to obtain returns for the investors from both Backwardation (the expiring futures contract is more expensive as the next delivery month) and Contango. The strategy commodity arbitrage tries to profit from price differences on various commodity markets or between related commodities.

The new fund invests indirectly into commodities via index derivatives such as Swaps and Futures. The fund’s portfolio consists of financial indices, e.g. the CAX - Commodity Arbitrage Index listed on the Vienna stock exchange. The Index was launched by Alternative-Index Ltd., a member of the Salus Alpha Group.


By introducing the first world wide daily liquid UCITS III hedge fund, Salus Alpha set the course for a new era of investment funds. Salus Alpha successfully established hedge fund strategies in mutual funds. Not surprisingly now Salus Alpha is the first asset manager to offer an arbitrage strategy as a UCITS III fund with daily liquidity.

Salus Alpha Commodity Arbitrage is listed on different fund platforms in Germany and Austria. Amongst others it can be found on Augsburger Aktienbank, Metzler Fund Xchange, Frankfurter Fondsbank, Fonds Depotbank, Cortal Consors, DAB, Moventum, Capital Bank and direktanlage.at.

Hedge Funds & Investors Rate Global Brokers

HedgeCo News - A recent survey of 176 leading investment managers, private banks and hedge funds by McLagan, a compensation consulting, productivity and performance benchmarking firm, showed that broker performance has again risen significantly in many areas this year, particularly in US and Asian markets and for OTC Derivatives.

When asked to rank the leading brokers on their 2009 Operational Performance and Client Service offerings across Equities, Fixed Income and OTC Derivatives, the managers rated as follows:

In the US:
Liquidnet – Best 2009 Broker for Equities Operations
Morgan Stanley - Best 2009 Broker for Fixed Income Operations
Deutsche Bank – Most Improved Broker

In Europe:
UBS - Best 2009 Broker for Equities Operations
UBS - Best 2009 Broker for Fixed Income Operations
Deutsche Bank – Most Improved Broker

In Asia:
UBS - Best 2009 Broker for Equities Operations
UBS - Best 2009 Broker for Fixed Income Operations
Morgan Stanley – Most Improved Broker

For Global OTC Derivatives:
Goldman Sachs - Best 2009 Broker for Core Processing
Deutsche Bank - Best 2009 Broker for Client Management
Morgan Stanley - Most Improved Broker

"The goal of UBS Operations is to be the leading client-focused global service provider." Simon Haggerty, Global Client Service Head at UBS said, "With 176 clients rating 15 brokers across a range of products & measures, the report provides a comprehensive and credible viewpoint on our performance. One of the most accurate and independent methods by which we can measure our progress is for us to sponsor, support and analyse the feedback obtained from this annual survey."

“In particular, UBS has leveraged this feedback to help develop our 2010 client objectives – that of delivering post trade service excellence. The feedback and rankings are taken seriously both within Operations, and also by our trading & sales partners.”

“Providing superior services and support for our Members is why we’ve been voted number one for overall performance in US Equities Operations for the second year in a row, and we very much appreciate this recognition,” said Seth Merrin, Founder and CEO of Liquidnet. “We continuously strive to deliver the best value and experience for our Members throughout the entire trading process.”

A key factor of the survey results this year was the increase in usage of technology by the buy-side, particularly implementation of OMGEO CTM for both Equities and Fixed Income. This has contributed to the rise in Straight Through Processing (STP) particularly in Electronic Trade Matching which in turn has reduced fails and re-work in the back-office.

Carsten Eckhardt, Managing Director, Global Business Services at Deutsche Bank added, "Deutsche Bank has made a commitment to improving its operational processes in order to provide exceptional service to its clients. The McLagan Z/Yen survey is key in enabling us to assess the extent to which we have achieved these goals and in highlighting areas of focus for further improvement."

Galleon Hedge Fund Fraud Case Claims 8th Guilty Plea

HedgeCo News Update - The Galleon hedge fund insider trading case yesterday saw its eighth guilty plea in Mark Kurland, a onetime colleague of Danielle Chiesi at New Castle Funds LLC, Reuters reports.

The SEC alleges that Kurland, Chiesi and a former executive at IBM, Robert Moffat, engaged in overlapping insider trading schemes, according to Reuters. Moffat's case has not been resolved, but his lawyer is talking with prosecutors, the newspaper said.

Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC is seeking it from Rajaratnam and his co-defendant, Chiesi.

Rajaratnam's lawyer attacked the U.S. government's wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid. A hedge fund manager known as "Tipper X", and hedge fund consultant Roomy Khan are cooperating with investigators in providing evidence against Rajaratnam.

Federal prosecutors have doubled the sum of the allegations and former senior partner at McKinsey & Co., Anil Kumar, pleaded guilty to conspiracy, insider trading and securities fraud.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.

The insider trading case involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp, and Chiesi, an executive at New Castle Funds LLC was also indicted on multiple counts of conspiracy and securities fraud.

A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.

SEC Wants Wiretap Evidence From Hedge Fund Founder Rajaratnam

HedgeCo News - The SEC asked a judge to order hedge fund founder Raj Rajaratnam to share wiretap recordings that his lawyers got from federal prosecutors, Bloomberg reports.

Because of legal hurdles in obtaining the 14,000 wiretap intercepts, the SEC is seeking it from Rajaratnam and his co-defendant, Danielle Chiesi, a New Castle Funds LLC executive.

“Defendants have the wiretap information; the commission does not,” SEC lawyer Valerie Szczepanik said in a letter filed in court, according to Bloomberg. “It would be highly inequitable and inconsistent with the federal rules to permit this case to be tried while defendants possess such an informational advantage.”


"The recordings were cherry picked and mismanaged and someone did not do their homework," Dowd told the Judge last week.

Rajaratnam's lawyer attacked the U.S. government's wiretap evidence saying he would file a motion to suppress the telephone recordings which were used to arrest Rajaratnam and more than a dozen other people in the Galleon raid. A hedge fund manager known as "Tipper X", and hedge fund consultant Roomy Khan are cooperating with investigators in providing evidence against Rajaratnam.

Federal prosecutors have doubled the sum of the allegations and former senior partner at McKinsey & Co., Anil Kumar, pleaded guilty to conspiracy, insider trading and securities fraud.

Rajaratnam was taken into custody in New York on Oct. 16, 2009 in what is being called the USA’s largest hedge fund insider-trading scheme.

The insider trading case involves the employees of some of America’s best-known companies, including International Business Machines Corp, McKinsey & Co and Intel Capital, an arm of Intel Corp, and Chiesi, an executive at New Castle Funds LLC was also indicted on multiple counts of conspiracy and securities fraud.

A civil lawsuit is scheduled for August 2, 2010. The prosecution has also indicted Rajaratnam on criminal charges.

The "Volcker Rule"

Obama: "We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest. And we cannot accept a system in which shareholders make money on these operations if the bank wins but taxpayers foot the bill if the bank loses."

"Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers." The President said, "If financial firms want to trade for profit, that's something they're free to do. Indeed, doing so –- responsibly –- is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people."

Remarks by the President on Financial Reform - Transcript

THE PRESIDENT: Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who's the former chair of the Federal Reserve Board; and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board that they've offered as we have dealt with a broad array of very difficult economic challenges.

Over the past two years, more than seven million Americans have lost their jobs in the deepest recession our country has known in generations. Rarely does a day go by that I don't hear from folks who are hurting. And every day, we are working to put our economy back on track and put America back to work. But even as we dig our way out of this deep hole, it's important that we not lose sight of what led us into this mess in the first place.

This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of quick profits and massive bonuses. When the dust settled, and this binge of irresponsibility was over, several of the world's oldest and largest financial institutions had collapsed, or were on the verge of doing so. Markets plummeted, credit dried up, and jobs were vanishing by the hundreds of thousands each month. We were on the precipice of a second Great Depression.

To avoid this calamity, the American people -- who were already struggling in their own right -- were forced to rescue financial firms facing crises largely of their own creation. And that rescue, undertaken by the previous administration, was deeply offensive but it was a necessary thing to do, and it succeeded in stabilizing the financial system and helping to avert that depression.

Since that time, over the past year, my administration has recovered most of what the federal government provided to banks. And last week, I proposed a fee to be paid by the largest financial firms in order to recover every last dime. But that's not all we have to do. We have to enact common-sense reforms that will protect American taxpayers -– and the American economy -– from future crises as well.

For while the financial system is far stronger today than it was one year ago, it's still operating under the same rules that led to its near collapse. These are rules that allowed firms to act contrary to the interests of customers; to conceal their exposure to debt through complex financial dealings; to benefit from taxpayer-insured deposits while making speculative investments; and to take on risks so vast that they posed threats to the entire system.

That's why we are seeking reforms to protect consumers; we intend to close loopholes that allowed big financial firms to trade risky financial products like credit defaults swaps and other derivatives without oversight; to identify system-wide risks that could cause a meltdown; to strengthen capital and liquidity requirements to make the system more stable; and to ensure that the failure of any large firm does not take the entire economy down with it. Never again will the American taxpayer be held hostage by a bank that is "too big to fail."

Now, limits on the risks major financial firms can take are central to the reforms that I've proposed. They are central to the legislation that has passed the House under the leadership of Chairman Barney Frank, and that we're working to pass in the Senate under the leadership of Chairman Chris Dodd. As part of these efforts, today I'm proposing two additional reforms that I believe will strengthen the financial system while preventing future crises.

First, we should no longer allow banks to stray too far from their central mission of serving their customers. In recent years, too many financial firms have put taxpayer money at risk by operating hedge funds and private equity funds and making riskier investments to reap a quick reward. And these firms have taken these risks while benefiting from special financial privileges that are reserved only for banks.

Our government provides deposit insurance and other safeguards and guarantees to firms that operate banks. We do so because a stable and reliable banking system promotes sustained growth, and because we learned how dangerous the failure of that system can be during the Great Depression.

But these privileges were not created to bestow banks operating hedge funds or private equity funds with an unfair advantage. When banks benefit from the safety net that taxpayers provide –- which includes lower-cost capital –- it is not appropriate for them to turn around and use that cheap money to trade for profit. And that is especially true when this kind of trading often puts banks in direct conflict with their customers' interests.

The fact is, these kinds of trading operations can create enormous and costly risks, endangering the entire bank if things go wrong. We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest. And we cannot accept a system in which shareholders make money on these operations if the bank wins but taxpayers foot the bill if the bank loses.

It's for these reasons that I'm proposing a simple and common-sense reform, which we're calling the "Volcker Rule" -- after this tall guy behind me. Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that's something they're free to do. Indeed, doing so –- responsibly –- is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.

In addition, as part of our efforts to protect against future crises, I'm also proposing that we prevent the further consolidation of our financial system. There has long been a deposit cap in place to guard against too much risk being concentrated in a single bank. The same principle should apply to wider forms of funding employed by large financial institutions in today's economy. The American people will not be served by a financial system that comprises just a few massive firms. That's not good for consumers; it's not good for the economy. And through this policy, that is an outcome we will avoid.

My message to members of Congress of both parties is that we have to get this done. And my message to leaders of the financial industry is to work with us, and not against us, on needed reforms. I welcome constructive input from folks in the financial sector. But what we've seen so far, in recent weeks, is an army of industry lobbyists from Wall Street descending on Capitol Hill to try and block basic and common-sense rules of the road that would protect our economy and the American people.

So if these folks want a fight, it's a fight I'm ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can't lend more to small business, they can't keep credit card rates low, they can't pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers -- that's the claims they're making. It's exactly this kind of irresponsibility that makes clear reform is necessary.

We've come through a terrible crisis. The American people have paid a very high price. We simply cannot return to business as usual. That's why we're going to ensure that Wall Street pays back the American people for the bailout. That's why we're going to rein in the excess and abuse that nearly brought down our financial system. That's why we're going to pass these reforms into law.

Thank you very much, everybody.